Dell’s special board committee reviewing a sale of the computer giant reaffirmed support today for a buyout led by company founder Michael Dell, and set a shareholder vote for July 18.
The panel said that “no superior offer has materialised” since the proposal was unveiled in February in which Michael Dell, with the investment fund Silver Lake Partners, would take Dell private in a $ 24.4 billion buyout.
“Dell’s independent directors unanimously recommend that you vote to approve the transaction by voting ‘FOR’ the Michael Dell/Silver Lake merger agreement,” said a letter to shareholders.
“We carried out a rigorous sale process calculated to obtain the highest price available... 21 strategic and 52 financial buyers were contacted and a number of parties conducted diligence, although no superior offer has materialised.”
The panel said the buyout at $13.65 per share “is the best alternative available — in a challenging business environment it offers certainty and a very material premium over pre-announcement trading prices.”
An alternative plan was proposed by corporate raider Carl Icahn, in which Dell would remain publicly traded, but undergo a leveraged recapitalisation with new management.
Icahn and other dissident shareholders, who hold around 13 per cent of Dell shares, called the planned buyout a “giveaway.”
But the Dell board committee said details of the bid were too vague, and declined to act further on the proposal without additional information.
The buyout would provide Michael Dell a chance to reshape the former No.1 PC maker away from the spotlight of Wall Street.
The move, which would de-list the company from stock markets, could ease some pressure on Dell, which is cash-rich but has seen profits slump, as it tries to reduce dependence on the slumping market for personal computers.